We play chess, they play Go

Anyone who owns a business and trades with China is faced with a country that has undergone a full transformation. Tom Van de Weghe analyses and explains the underlying drivers that help the Chinese economy make a global impact. From DeepSeek to the new Five-Year Plan and the digital Silk Road: a fascinating and necessary trip for business owners, complete with a roadmap.

The China that European companies and policymakers collaborate with today no longer exists. China expert Tom Van de Weghe opened his keynote speech with this keen observation at Commercial Banking’s latest AsiaPacific event.

When Van de Weghe, correspondent for the Flemish public broadcaster VRT, travelled to China in 2004, his first report was from a wooden flooring factory owned by a Belgian entrepreneur. There he met Smiley, a young Chinese worker who lived and worked in the factory. Twenty years later Smiley pops up again, but this time in a video message. He is now Director of Global Production, visits factories on various continents and calls himself a millionaire. His personal story is a perfect metaphor for China: from low wages and executive tasks to growth in scale, competence and self-confidence.

Van de Weghe says the transformation is now complete. China is no longer just ‘the factory of the world’, but increasingly acts as the world’s engineer as well. The turning point seems to have occurred remarkably recently, in January 2025, when a Chinese AI model known as DeepSeek caused a global stir. The model is just as powerful as the best US alternatives, but was built with 90 per cent less computing power. That is no coincidence, Van de Weghe claims, but rather a direct consequence of US sanctions that blocked China’s access to advanced chips. Scarcity necessitated radical efficiency and creativity, and that is precisely where innovation emerged.

What happened next is typical of the Chinese approach, he believes. In just a matter of days, DeepSeek grew from a technological experiment to a national symbol. The shy IT nerd appeared on national television alongside President Xi Jinping, AI turned into a national obsession overnight, and parents demanded that their children learn Python. That moment in time not only changed China’s tech landscape: it also transformed the field of competition in which European companies operate. Chinese suppliers and competitors have taken note – and are acting on it

According to Van de Weghe, several forces are driving this acceleration. State aid plays a crucial role here, but not in the traditional, cumbersome way that Europeans tend to expect. China combines large-scale resources with great precision: start-up funds, local R&D subsidies, state-owned companies as anchor customers and national venture capital funds that provide part of the funding. A second important driver is the new generation of business owners: they are young, have completed technical training, often with STEM diplomas from top universities, and differ fundamentally from their predecessors. They don’t see the government as an obstacle you need to steer clear of, but rather as an ally within a single state-market condominium.

This system produces results. In just over two years’ time, the number of Chinese AI models has grown from a few dozen to more than 500. Competition is fierce – China even has a word for it: ‘involution’, meaning extreme competition with diminishing returns – but it is this very pressure that cleanses the market. Weak players drop out of the game and the survivors emerge battle-hardened, combining speed, price and quality in a way that ensures worldwide competition.

At the same time, Van de Weghe points out a paradox: China is building world-class AI but has so far failed to turn this technology into real commercial success. Income from consumers remains limited when compared to the US, and that is precisely where he sees potential European leverage. European companies have traditionally been more successful when it comes to commercialisation, brand building and sustainable business models. Although this gap is not a guarantee, it does provide an opportunity – if Europe acts swiftly.

According to Van de Weghe, this is because the threat lies not in Chinese AI models per se, but in what the Chinese companies do with them. China is playing a different AI game than Silicon Valley. Where the US focuses on building the most powerful model and dreams of Artificial General Intelligence (AGI), China focuses its efforts on rolling it out everywhere, as quickly and as cheaply as possible. AI as ‘infrastructure’, like electricity: you don’t need the world’s most powerful dynamo to light a billion homes; you need one that’s good enough and you need an excellent power grid. It needs to be available everywhere and immediately applicable. This translates into ‘dark factories’ – plants without lights and with robotised production lines and invisible integration of AI into production, logistics and agriculture.

This logic does not stop at the Chinese border. Using what Tom Van de Weghe calls the ‘digital Silk Road’, China is rolling out cloud infrastructure, AI models and data centres in Southeast Asia, the Middle East, Africa and Latin America. Countries like Singapore, Brazil and Malaysia increasingly opt for Chinese technology – not for reasons of ideology, but on the basis of cost-benefit logic. For European companies with customers in those regions this is not a future scenario, but a current reality.

Europe, and Belgium in particular, is positioned rather uncomfortably in this respect. Our country is already a major logistics hub in trading between China and Europe, with railway connections that directly connect Chinese provincial towns with Antwerp. At the same time, our independence – from rare raw materials to batteries, and from EVs to cloud infrastructure – is growing. Dependencies that once seemed economically sensible are now increasingly posing operational and geopolitical risks.

Yet Van de Weghe believes it’s not all doom and gloom; even though the windows of opportunity are steadily narrowing, we should not forget our own strengths. China certainly faces real structural problems – a real estate crisis, deflation, youth unemployment and overcapacity in several sectors – but underestimating the situation is dangerous, Tom warns. Even if many companies collapse, the ones that survive come back stronger, supported by scale, automation and state power.

So the key question for Europe is not whether collaboration with China is desirable, but how to go about it. Anyone who wants to remain relevant must reassess their exposure, look beyond tier 1 and realise that today’s suppliers could be tomorrow’s competitors. At the same time, there are still opportunities: in services, green funding, the silver economy (e.g., pensions), financial infrastructure and the top end of the consumer market. These opportunities call for speed, strategic insight and, above all, action.

But first and foremost, we must play our own game, Van de Weghe believes. And the game metaphor provides a fitting concluding message that will linger in your mind. The world’s oldest board game is Go or Weiqi, which is Chinese and complicated. The essence of the Go game is that you don’t win by attacking your opponent head-on or by destroying them (like in chess), but by surrounding territory. China thinks in patterns, in positioning, in long lines, which is reflected in the Chinese takeovers of, and shares in, ports and railways all over the world, for example. The challenge for Europe is not to copy the game, but to play its own game – with transparency, diversity and the rule of law as strategic assets. There is a bridge between fear and opportunity, but only those who move will be able to cross it.